Recent Declines Follow Decade of Gains
After a decade of rising land prices from 2002 to 2012, Argentina farmland prices have fallen for the third consecutive year, according to a new report from the Argentine Chamber of Rural Real Estate (CAIR).
The new average rural land price data was presented by CAIR President Cristian Belaustegui at an industry event meant to summarize trends across various sectors in Argentina real estate. The summary in Reporte Inmobiliario features a graph titled The Evolution of Argentina Land Prices between 2000 and 2015.
Average prices of cattle, crop and mixed production farms in Argentina were all badly beaten down following the 2001/2002 crisis before embarking on a decade-long increase in average prices. That trend reached its apex for all three categories of farmland in 2012 and has continued falling for three consecutive years.
Argentina Average Farmland Prices By Sector
The average price of Argentina cattle land was around US$300 per hectare in 2002 and reached a peak of US$3,500 per hectare in 2012. Today the average pice of Argentina cattle land is US$2,900 per hectare or 17% below the peak price of 2012.
The average price of Argentina mixed production farmland was around US$1,100 per hectare in 2002 and reached a peak of US$9,500 per hectare in 2012. Today the average pice of Argentina mixed production farmland is US$7,000 per hectare or 26% below the peak price of 2012.
The average price of Argentina cropland was around US$4,000 per hectare in 2002 and reached a peak of US$17,000 per hectare in 2012. Today the average pice of Argentina cropland is US$12,800 per hectare or 25% below the peak price of 2012.
Short-Term Outlook Unfavorable Given Global, National Factors
Average farmland prices in Argentina are likely to remain on the current trajectory given a confluence of global factors impacting producers: the general stagnation of emerging markets, recent stabilization in global food demand and commodity prices treading water at five-year lows.
The local outlook is equally opaque in Argentina where returns for rented farmland have fallen from around 7% in key growing regions in 2010 to 1% today after taxes. With presidential elections only weeks away, the focus turns to 2016 and what changes a future administration might make to policies impacting Argentine producers. (Full Story in Spanish)
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